Future is international exports

December 8, 2013

In the most recently proposed regulations in the Obama Administration's war on coal, the Environmental Protection Agency (EPA) has now exercised the nuclear option. The newly proposed limit on greenhouse gas emissions from new coal-fired power plants has the potential to break the back of the coal industry in West Virginia. Worse yet, the EPA is going on a series of listening events where it will seek comments about the regulations and whether they should apply to existing power plants. It should come as no surprise they will not be coming to West Virginia.

With the Democrats in Washington bent on the destruction of coal-fired energy in this country, it is time to explore other options to sustain and bolster West Virginia's energy economy, which has been a legacy industry in the state's economy for more than a century. To survive, West Virginia must focus its efforts on international energy exports to Asia to backfill the mandated reduction of coal consumption in this country and grow the natural gas production in the state for export to markets beyond the U.S.

There are several developments that are paving the way for the potential future of West Virginia energy exports to Asia. One monumental development, which is set for completion in 2015, is the expansion of the Panama Canal. For the first time ever, coal shipments will be able to pass through the Panama Canal and will cut the days for shipping from the East coast to Asia from 41 days at present to 25 days. Furthermore, there is a growing demand for coal in countries like China, India, Japan and South Korea, all of which were top 10 importers of West Virginian goods in 2012.

While the expansion of the Panama Canal will enable increased coal exports from the U.S. to Asia, the major impact will be on the export of natural gas to Asia, which is converted into liquefied natural gas for export (LNG). Most economic experts have stated that LNG exports to Asia will have the biggest growth potential for U.S. energy exports in the future. Additionally, energy experts almost unanimously agree that the largest markets for the export of U.S. LNG are in Asia. Prime markets for LNG in Asia are China, India, Japan and South Korea, all of which were mentioned above.

In an uncharacteristic move in November, Obama's Energy Department granted Dominion Resources permission to export LNG from its southern Maryland terminal to countries that do not have free trade agreements with the U.S. -now they can export to Asia. This new ability to export from Maryland to Asia via the expanded Panama Canal, coupled with the development and completion of LNG processing plants in West Virginia will set the optimal conditions for international LNG exports from West Virginia.

With all of these developments underway, West Virginia needs a clearly articulated strategy of how the state is going to take full advantage of these burgeoning international economic opportunities. There have been many discussions on this topic around the state, in the Legislature, within the governor's administration, at policy forums, and conferences. Indeed, during Gov. Tomblin's term overseas export of coal have increased 40 percent, from $5.3 billion in 2011 to $7.4 billion in 2012, which top consumers were Netherlands, Italy, India, China and Brazil. We are clearly moving in the right direction, but we need a roadmap that must be aggressively promoted within and outside of the state to attract the maximum amount of investors and businesses, ensuring a competitive process. A clear strategy would provide assurances to businesses and investors, giving them confidence and a predictable government partner in Charleston. Our strategy or roadmap, at a minimum, must comprise three things: vision, incentives and predictability. These three conditions can go a long way to ensure business that they are operating in stable environment and will not be ambushed down the road by things like exorbitant tax hikes or increased state regulation.

This is an exciting time for West Virginia and we need to capitalize on these developing opportunities in international energy trade. West Virginia has always been an energy-producing state, and these developments have the potential to ensure our way of life continues for many years to come.

- Riley Moore is a resident of Harpers Ferry and is running for the Jefferson County Republican Executive Committee in 2014.